Evening Report | July 15, 2024

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Corn conditions unchanged... USDA rated 68% of the corn crop as “good” to “excellent” as of Sunday, unchanged from the previous week. Analysts expected a one-point improvement. The “poor” to very poor rating held at 9%.

USDA reported 41% of the crop was silking (32% five-year average) and 8% was in dough stage (4%).

Soybean conditions also unchanged... USDA rated 68% of the soybean crop as “good” to “excellent,” unchanged from the previous week, though there was a one-point decline in the top category. Analysts expected a one-point improvement. The “poor” to “very poor” rating held at 8%.

USDA reported 51% of the soybean crop was blooming (44% average) and 18% was setting pods (12%).

Cotton conditions stabilize after recent drop... USDA rated 45% of the cotton crop as “good” to “excellent,” unchanged from last week. The “poor” to “very poor” rating held at 23%, though there was a one-point increase in the bottom category. The Texas crop was rated 34% in the top two categories and 32% in the bottom two.

USDA reported 64% of the crop was squaring (63% average) and 27% was setting bolls (22%).

Spring wheat conditions improve... USDA rated 77% of the spring wheat crop as “good” to “excellent,” up two points from last week. Analysts expected no change. The “poor” to “very poor” rating improved one point to 3% (all “poor”).

USDA reported the spring wheat crop was 76% headed (78% average).

Winter wheat harvest slower than expected... USDA reported winter wheat harvest reached 71% as of Sunday, nine points ahead of the five-year average but three points slower than analysts expected. Harvest stood at 100% in Oklahoma (99% average) and 97% in both Kansas (96%) and Texas (98%).

NOPA soy crush a record for June but lower than expected... Members of the National Oilseed Processors Association (NOPA) crushed 175.6 million bu. of soybeans during June, which was a record for the month but lower than the 177.9 million bu. analysts expected. Soybean crush declined 8.0 million bu. (4.4%) from May but increased 10.6 million bu. (6.4%) from last year.

NOPA implies the full June crush of about 184.0 million bushels. At that level, crush would be on pace to match USDA’s forecast of 2.290 billion bushels.

Soyoil stocks at the end of June totaled 1.622 billion lbs., down 102 million lbs. from May and 68 million lbs. below year-ago.

Updates to USDA’s meat balance sheets... USDA raised its beef production forecast for 2024, with higher expected steer and heifer slaughter more than offsetting reduced cow kills. USDA still forecasts beef production will decline 1.2% from last year. The beef export forecast for this year was raised due to “stronger-than-expected demand in a number of key markets.” USDA now projects an average cash steer price of $186.86, up $2.85 from last month and $11.32 above year-ago.

For 2025, USDA raised beef production, though it is still expected to fall another 4.5% from this year. The beef export outlook was unchanged from last month but expected to plunge 14.0% from this year. USDA raised the projected average cash steer price by $2.00 from last month to $191.00.

USDA raised its pork production forecast amid higher projected weights during the second half of this year. Pork production is now seen increasing 3.1% from last year. The export outlook was cut based on recent trade data, though shipments are still expected to climb 6.2% from last year. USDA cut its average cash hog price forecast by $2.09 from last month to $59.13, which would still be up 54 cents from last year.

For 2025, USDA raised the pork production outlook, which is now expected to increase another 1.5% from this year. The export outlook was unchanged, though shipments are expected to expand another 5.1%. USDA cut its 2025 average cash price projection by $1.00 from last month to $59.00.

H5N1 confirmed in Oklahoma dairy months after samples taken... USDA confirmed a case of the H5N1 virus in an Oklahoma dairy, becoming the 13^th state with an outbreak. The Oklahoma dairy collected the positive sample in April when it suspected its herd may have been infected, said the Oklahoma Department of Agriculture, Food and Foresty. The dairy recently sent stored samples to USDA for testing after the farm learned it could receive financial assistance for lost milk production from H5N1. Oklahoma’s agriculture department thinks USDA received the dairy’s samples in the first week of July.

Meanwhile, the U.S. Centers for Disease Control and Prevention deployed a field team of nine people including epidemiologists and veterinarians to Colorado to help the state manage its H5N1 outbreak after it confirmed four human infections in dairy workers and a suspected fifth case.

Powell: Data ‘add somewhat to confidence’ inflation is returning to target... Federal Reserve Chair Jerome Powell said recent U.S. inflation readings “add somewhat to confidence” prices are returning to the Fed’s 2% target in a sustainable fashion. Powell told the Economic Club of Washington, “In the second quarter, actually, we did make some more progress” on taming inflation. We’ve had three better readings, and if you average them, that’s a pretty good place.”

Powell’s remarks are likely his last until his press conference following the Fed’s July 30-31 meeting.

Markets continue to expect a September rate cut followed by additional cut(s) by year-end.